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Real Estate ETF (XLRE) Hits New 52-Week High

Sweta Jaiswal, FRM

For investors looking for momentum, Real Estate Select Sector SPDR Fund XLRE is probably a suitable pick. The fund just hit a 52-week high, up roughly 36.2% from its 52-week low of $29.52/share.

But does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

XLRE in Focus

The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Real Estate Select Sector Index. It provides precise exposure to companies from real estate management and development and REITs, excluding mortgage REITs. XLRE is charging 13 bps in fees. The fund has amassed $4.06 billion in AUM (see all Real Estate ETFs).

Why the Move?

The Federal Reserve has cut interest rate for the second time at the FOMC meeting in September 2019. When interest rate drops, mortgage rates fall, making real estate or refinancing mortgages more affordable. This in turn results in higher real estate sales.

More Gains Ahead?

Currently, the fund has a Zacks Rank of 2 (Buy) with a High risk outlook. It seems that XLRE might remain strong given a positive weighted alpha of 27.07.

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Real Estate Select Sector SPDR Fund (XLRE): ETF Research Reports
 
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